OK - great that you fixed the policy file stuff.
Strange error you are getting now - are you getting the "Advertising completed" message in your server? Are you sure you haven't added some error handling code in the catch() in the server's main() that could "ignore" an error by doing nothing? Since you haven't mentioned codebase yet, and it's the next common problem people usually run into now - I'm wondering if you're really getting an error due to codebase not being set, not succeeding in binding to the registry, and something is causing the error to be "eaten"...
codebase is kind of like classpath, but used for remote programs. If you really have the classpath set to nothing when running rmiregistry, then the initial bind to the registry will throw an exception, because the registry cannot find/load your stub class.
You would do something like this to set the codebase -
Also, in your client - before you do the lookup(), try to do a registry.list() - this returns an array of Strings, and you can print them out to see if the object you're looking for is there, or if there's been a slight misspelling in the name you're looking for.